Aug 4, 2020| Uncategorised

Dr. Shen: Positive Consumption Growth is Important for China’s Economy in H2 2020

Vivian Yang

by Vivian Yang

“Promoting consumption to achieve positive growth should be a key consideration in the second half of the year. The crux of the matter is how to enhance the income level of low-and middle-income groups, especially migrant workers, and to ensure the stability of employment and key market players,” said Dr. Jianguang Shen, Chief Economist of JD Digits at the China Wealth Management 50 Forum which is held online on August 3^rd.

The Forum was under the theme of “Mid-Term Outlook: Current Macro Situations and Economic Trends”, with participants from the government, academia and business, to identify challenges and give policy advice on China’s economic development. Dr. Shen was invited to give a speech at this forum.

Based on JD’s big data on consumption, Shen pointed out three changes of lower-income people.

First, consumption data in June showed that people in higher-tier cities (1^st to 3^rd tiers) spent more than those from the lower-tier cities (4^th to 6^th tiers), which is a major departure from the consumption trend prior to the pandemic. This may be because under the impact of COVID-19, middle-and low-income people hired by SMEs were hit harder than high-income people who mostly work for big companies or high value-added tech industries.
Second, based on the population migration data, many migrant workers and rural labor forces from the lower-tier cities have not returned to higher-tier cities. People who moved out of the 1^st tier cities to the 4^th to 5^th tier cities during the pandemic period account for more than 50% of total migrants.
Third, consumption data showed that expenditure of higher-income groups on consumer electronics increased during the pandemic and people purchase more telecommunications devices to work from home. But remote work is not an option for many lower-income people as they won’t spend or cannot afford to spend on these items.

Considering all of this, Shen suggested to increase income subsidies for migrant workers in the second half of 2020.

The China Wealth Management 50 Forum (CWM50) is a non-governmental and non-profit academic think tank based in Beijing. It is dedicated to building a premium platform for professionals who are interested in the Chinese wealth management industry. The platform aims to facilitate the exchange of theories, thoughts, innovations, and experiences.

(vivian.yang@jd.com)

Apr 1, 2024| Uncategorised

JD Chief Economist: Tech-Driven Supply Chain Revolutionizes Gen-Z Consumer Engagement in China

Vivian Yang

At the inaugural FORTUNE Innovation Forum in Hong Kong on March 28th, Dr. Jianguang Shen, chief economist of JD.com, highlighted the transformative impact of tech-driven supply chain solutions in meeting the dynamic needs of Gen-Z consumers in China.

“Gen-Z consumers are very discerning and pragmatic,” said Dr. Shen. “They don’t care if the brand is local or global.” Dr. Shen began by discussing the increasing sophistication of younger Chinese consumers. “The rising popularity of local products can be attributed to China’s supply-side reform, which has enabled brands to provide lower-cost products with higher quality,” he said. Shen also emphasized the strategic advantage that brands can achieve by leveraging advanced digital supply chains, which offer deep insights into consumer behavior, thereby tapping into substantial market opportunities.

Joining Dr. Shen were industry leaders including Angela Wei Dong, Global Vice President China at Nike; Pontus Erntell, President and Chief Sustainability Officer at IKEA China; and Doreen Wang, CEO of Kantar China and Global Head of BrandZ. Together, they shed light on the shifting preferences of China’s youth towards quality, sustainability, and enhanced social engagement in their retail experiences, especially amid economic headwinds, prompting brands to adapt swiftly.

Drawing examples from JD.com’s platform, Dr. Shen discussed the rising popularity of eco-friendly mini refrigerators among Gen-Z consumers. These products, aligning with Gen Z’s penchant for tech-savvy and environmentally conscious offerings, underscore the necessity for brands to evolve and align with consumer preferences.

Furthermore, Dr. Shen discussed the positive impact of a new government policy encouraging trade-in of consumer goods, which is expected to boost consumption. Leveraging JD.com’s robust supply chain capabilities, customers not only can easily trade in old appliances for more modern and eco-friendly goods but also benefit from a suite of JD’s attentive services such as doorstep pickup, installation, and recycling.

The conversation also touched upon the strategic collaborations under the Consumer-to-Manufacturer (C2M) model between JD.com and numerous brands, aiming to streamline the journey from product ideation to distribution. This collaboration has welcomed over 4,000 brands to JD.com’s C2M platform, drastically reducing product research and market introduction times by 80% and 70%, respectively, thereby fostering a mutually beneficial ecosystem for brands, retailers, and consumers.

Dr. Shen concluded by emphasizing JD.com’s commitment to technological innovation, with its deployment of AI-driven chatbot customer service, highly automated warehouses, autonomous delivery vehicles, and integrated retail solutions that bridge both online and offline domains. These innovations are designed to meet the dynamic preferences of consumers, enhancing the overall shopping experience and setting a new standard in consumer engagement.

(vivian.yang@jd.com)

Mar 8, 2024| Uncategorised

JD.com’s Strategic Advancements in International Business: A Focus on Supply Chain and User Experience

Vivian Yang

During JD.com’s earnings call for Q4 and FY2023 on March 6th, Sandy Xu, CEO of JD.com and JD Retail, provided an update on the company’s strategy for international expansion. Xu emphasized the importance of a robust supply chain as the cornerstone of JD.com’s growth beyond domestic borders.

Xu noted that JD.com is always on the lookout for overseas opportunities and is taking measured steps to advance this process. Given JD’s business model and inherent strengths, the company’s approach to global expansion is uniquely tailored.

“JD’s business model is built on supply chain capabilities and centered around user experience. Based on the development of supply chain infrastructure overseas, JD’s business will continue to expand in areas with our unique competitive strengths in global markets,” Xu said. She also provided an overview of JD.com’s current international businesses:

JD Worldwide, the export and import facet of JD Retail, incorporates JD Global Sales, an emerging outbound e-commerce platform dedicated to helping Chinese companies and brands expand their overseas market. JD’s cross-border inbound business, JD Global Buy, has established three direct procurement centers worldwide to enhance cross-border supply chain efficiency. This allows consumers in China to access a wider range of imported products at lower costs while ensuring product safety.
JD Logistics has developed a robust global supply chain, beginning with warehousing and expanding to encompass comprehensive supply chain services. Currently overseeing nearly 90 bonded, overseas, and direct mail warehouses across almost 900,000 square meters, JD Logistics provides extensive support to a broad spectrum of clients, including international enterprises and Chinese brands expanding overseas.
JD Property is expanding its business in Southeast Asia and Europe, with a focus on markets in Vietnam, Indonesia, Singapore, the United Kingdom, and the Netherlands. Its clientele spans international logistics, FMCG (fast moving consumer goods) giants, as well as emerging Chinese companies venturing abroad.
Ochama is an omni-channel retail platform incubated by JD.com in Europe, which utilizes advanced automated logistics technologies and global supply chain capabilities to provide a superior shopping experience for consumers across 24 European countries.

With a focus on supply chain and enhancing the user experience, JD.com will continue to explore opportunities to expand its global footprint. Learn more about JD.com’s businesses with global reach here.

(vivian.yang@jd.com)